S. African platinum mine strikes spread – by Javier Blas (Financial Times/Globe and Mail – August 23, 2012)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

Platinium mine after platinum mine, the labour unrest in South Africa is spreading. Terence Goodlace, chief executive at Impala, the world’s second-biggest platinum miner, warned on Thursday of a “significant risk to the industry.”

The warning came only a day after workers at two other platinum mines also demanded higher salaries and blocked the entrance to several underground pits, prompting concerns of full-blown industrial unrest in South Africa, one of the world’s most important commodity producers. The country is home not just to platinum but also to significant deposits of dozens of other minerals.

Yet, industry executives, analysts and bankers point out that the unrest so far remains concentrated in the restive platinum sector, with little sign that it is spreading to other commodities such as gold and iron ore, which have a history of better labour relations.

The violence – which has left at least 44 people dead and more than 70 injured – started two weeks ago when a group of drill operators at London-listed Lonmin demanded substantial wage increases amid a turf war between rival unions.

Platinum prices surged to a four-month high of $1,558.49 (U.S.) per troy ounce on Thursday, extending a rally to 12 per cent over the past week, as nearly a fifth of the world’s output was shut down to mark a memorial for the victims.

Peter Attard Montalto, analyst at Nomura, warned that the crisis at Lonmin was “only the tip of the iceberg,” adding that if the miner caves in and meets its workers’ wage demands, then demands by other workers “will increase across the mining sector and not just in platinum.” Some other executives share this concern.

Yet, the price of other metals and minerals for which South Africa is a key producer remains largely unaffected. The chamber of mines of South Africa says 95 per cent of the country’s mines are operating as normal.

But the central role that the country plays in the global natural resources market is keeping everyone on edge. South Africa holds the world’s largest reserves of more than a dozen minerals, including platinum, manganese, chromium, gold and aluminum silicate. On top of that, the country holds also considerable deposits of other commodities such as vanadium, zirconium, titanium, antimony, nickel, uranium, thermal coal and iron ore.

For the rest of this article, please go to the Globe and Mail website: http://www.theglobeandmail.com/report-on-business/international-business/african-and-mideast-business/s-african-platinum-mine-strikes-spread/article4495593/